Signaling and Indian Higher Education

From Delhi, the former Mughal capital to Mathura, Krishna’s birthplace, is about 150 km, roughly 75 miles. The route traverses a portion of the Grand Trunk road. In Kipling’s time it was a “river of life as nowhere else exists in the world.” That river is now one of tar and concrete. The jostling of barber and bunnia has been replaced by that of car, lorry, scooter and the occasional tractor going the wrong way down a two-lane highway.

Two weeks ago I traveled this stretch of history and counted no less than ten private institutions of tertiary education. Some are named after merchant princes, like the G. L. Bajaj Institute of Technology. Others have prosaic names, like the Rajiv Institute of Technology; this would be akin to Bob’s Institute of Technology. Some choose names to suggest their aspirations, like the Excel Institute of Management. Notice the popularity of the word `institute’. Almost invariably they were institutes of technology or management or both. The smallest of these occupied one floor of a large house and the largest a complex of five buildings spread over an acre or two.

This multitude of private organizations offering a tertiary education is reflection of a severe shortage of Universities in India. One estimate pegs the available supply at only 7% of India’s college age population. The private sector has stepped in. Forbes magazine has estimated this market to be worth around 50 billion U.S. The size of the market has attracted many entrants all of whom advertise aggressively; billboards, internet, T.V. and newspapers. In fact, such advertising is a major revenue source for newspapers. Some would fold without it, and thereby hangs a tale for another post.

The naming convention reflects the stringent way in which tertiary education in India is regulated. To call oneself a University requires a license. The label institute or school does not. However, one cannot issue degrees without a license, and so on and so forth. The focus on technology and management reflects a view that education is only useful insofar as it leads to a lucrative job.

The groves of academe are definitely not lucrative. This has produced a decided shortage of faculty. Newsweek claims that a quarter of existing university positions lie vacant and and 43% of current faculty do not have a Ph.D. (and don’t ask about those who do). The upshot is that India offers only three varieties of higher education.

First, low price and low quality for a select few. These are the IIT’s and the IIM’s. In India there is a quaint belief that these handful of institutions are `world class’. Apart from some isolated departments, this is not true. This assertion will generate a response. So, let me lay on the kindling. It is doubtful if many of the faculty at these institutions would find employment in any top 20 university in the states. Note the implicit assumption in this arrogant statement: quality of faculty research is positively correlated with the ability to produce men and women qualified to `hold dominion over palm and pine’. I’ll get back to this later.

Second, high price and low quality offered by private institutions; here one pays for infrastructure. If one must attend college, it might as well be pleasant. So, tennis courts, air-conditioned class rooms etc.

Third, low price and zero quality for the rest. These are the government run Universities bedeviled by student strikes and chronic faculty absenteeism. I know, very French.

It suggests graduating from a tertiary institution in India is nothing more than signaling device to potential employers. This seems to be particularly true of the institutions in the first category. Collectively they admit less than 2 % of those who apply (and even the group that apply is screened before hand) through a joint entrance exam. If the added value of time at these institutions is close to zero, why hasn’t the market unraveled? Why aren’t employers making offers to students when the results of the joint entrance exams are announced?

Amongst the private institutions one finds a range of ambitions. One, with a billion dollar endowment, seeks to rival Stanford and Harvard. At the other extreme are diploma mills with classrooms, classes and warm bodies to staff them. These seem to be well known as lists of `fraud universities’ circulate on the internet. Nevertheless, they persist. How? Why hasn’t competition driven out `bad’ institutions?

Last, what if quality of faculty research is unrelated to the ability to educate undergraduates? As pointed out to me by Mallesh Pai, “if we measure a university by the quality of graduates it can signal it’s producing, then the IIT’s and IIM’s achieve this in a significantly more cost-effective way than the Ivies.”

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18 comments

It’s true that the quality of the IIT-JEE exams makes them effective signals. To score well enough to attend a top institute, you really have to be an extraordinary student, the type of person at age 18 who would be a great hire at age 22 even if she learned nothing in College.

I believe Akerlof pointed out that such signals can remain durable if the top students also have a preference for College education over working. So students prefer to stay in College and take the offer when they finish (perhaps similar to how Goldman Sachs recruits TFA students to piggy-back on their recruitment process (including the self-selection aspect), but only hire after they finish their tour).

Is this cost-efficient signaling? Keep in mind that costs to the student are low, but cost to the state is high (where it is zero for the Ivys) in the form of subsidies. These may be low in dollar amounts, but are much higher in PPP or in terms of opportunity cost. Plus that extra Ivy spending does presumably add some value.

I would like to see some numbers before pronouncing the higher education market a failure (and even if it is, the role of onerous government regulations should be considered). Many of the same characteristics apply to the market for secondary/primary education, but those schools tend to perform very well (often beating state schools in performance tests). It’s the private NITs, not the IITs, that spin out the majority of Indian engineers.

People come to India for their vacations for couple of weeks; they see India and then comment without understanding the complexity of India. They Compare India with US, UK etc. Every such writer point out problems (Easiest task in the world) but no one try to give single solution. They even don’t understand India is having such a diversified culture with such a large population. If I replace population and diversity of India with US, i don’t think even US can survive

The author has some good points, but IMHO he does not see the complete picture.

The IIT-JEE (Joint Entrance Examination), the examination used to recruit students into these institutions is arguably the most grueling experience for a high school kid anywhere in the world. Thousands of students all over India spend upto two years of their lives doing nothing other than preparing for these exams. There are many side-effects to this phenomenon.

First, these exams are not like the regular school exams which essentially promote rote learning. The problems are designed to make you think. Two years doing nothing but solving physics and maths problems hones your problem-solving ability to a very high degree.

Second, the pressure to succeed is immense and the competition is cut-throat. Anyone who has successfully been through two years of such an ordeal will be able to handle stressful and tense situations a lot better. This kind of a mindset is a natural fit for a lot of careers that these kids will eventually go on to take up, thereby increasing their chances of success.

Related Reference : See this Al-Jazeera documentary on a guy who runs an IIT Training school in India’s poorest and most lawless province Bihar -http://english.aljazeera.net/programmes/witness/2009/02/2009237166461635.html

If anything, your description of the entrance process seems to strengthen the argument that the IIT’s (for example) are all about selection and less about adding value after admission. India, of course, is not unique in having such high stakes tests for admission to elite Universities. Japan, comes to mind. Interestingly, I am told, that University is treated as a well deserved holiday from the life of toil leading up to admission. Rumor (and one cannot resist spreading them) has it, that there is something of a holiday air at the IIT’s. So, my question remains, why not hire based on the results of the joint entrance exam? Why wait?

HR and Education have been ignored since the 1960s in India (when Indira Gandhi took over). It has been abused and neglected for decades.

A lot of these “institutes” are now owned by politicians who earn huge sums of money through these institutes. As a result of which, no reforms have taken place and no politician is interested in doing anything about it since that would mean taking a huge hit on their sources of revenue.

Having said that, the new Congress government has a very able man as the HR Minister and he’s going full steam ahead with reforms etc as far as HR and education is concerned. So hopefully in the next 4-5 years something good will come out it.

I’ve heard this as well; that many of the institutes are side businesses for politicos. I’d be curious to know the numbers. However, the puzzle remains of why so many of these institutes with sub par facilities, faculty and placement continue to survive. On the flip side, some appear to be quite ingenious. One appears to have started it’s own consulting firm, to employ it’s own graduates so as to boost it’s placement statistics (but for the life of me I can’t see how this is sustainable over the long run).

Tertiary education in India appears to be more a complex equation of emotional and societal-signalling, and less a promise of educational-excellence and human-development.

Every middle-class parent seems to dream (personally) and demand (of their wards) that life would worthy of living ONLY if adorned with an admission letter from one of the “II..” … fill in the blanks with a “T” for the younger offspring and an “M” for the older ones.

This silly and simplistic ‘vision’ of success results in kids spending their most formative years neck-deep in textbooks … trodding from one entrance-prep class to another … instead of developing more well-rounded skills and a fuller human personality.

It is ironic that the cottage industry that provides entrance-preparation courses itself has entrance-tests to ensure that only ‘the best’ are enrolled. Those that ‘admit anyone’ signal that they are not worthy of one’s time and energies, and soon enough you find almost every institute tout a ‘tough selection’ process … for entrance-preparation training!

The “lucky” few that happen to pass the entrance filters and enrol in the “II..’s” then go one to become local celebrities, at a relatively tender age … further fueling the self-deception of greatness. “They have arrived, even before the journey of life has begun”. For most, the process of learning ends right here, given that they have achieved the very pinnacle of success as ordained by their elders and accepted by the wisdom of society.

The “unlucky” ones end up recovering from this failure, and go on to try the second and third tier institutions. Of course, their parents end up explaining in many creative ways why their ward “chose not to go to the II..”.

Meanwhile, (some / many / most) kids from the “top” schools end up graduating with a strong sense of self-entitlement … and end up expecting a civil society that reveres them for their rite of passage through the II..’s. Therein lies another tale … about the many decades of self-deception that follow … and the creative-destruction that ensues when they choose to congregate largely within their own flock?

Why can’t the biggest democracy in the world truly make the tertiary ed process more democractic and let the voice of industry assess the schools on their true merits? Why cant the schools that currently enjoy their position and perch INNOVATE to become better and thus push the bar higher for all?

Sports, creative arts and other forms of human expression are lost in the narrowly focused pursuit of “entrance into the II..”.

This is not a post by one “spurned” by the II..’s , but by one that chose NOT to run in the rat race … and instead follow one’s heart and make the path vs. trodding with the masses …

Having studied both at an IIT and at a top school here in the US, I obviously have a take on this and here are my 2 cents:

1. I mostly agree with the IIT faculty not being world class, but as with the last point you mention, I think this is not fully correlated with the ability to produce good undergraduates. In particular, although most of the IIT faculty are not top researchers, they do have a pretty solid grasp of the fundamentals of a field. For instance, they may not publish very often in STOC/FOCS, but they can certainly teach Introduction to Algorithms very well. Also, unlike in the US, a “bright” undergrad gets a lot of one-on-one time from the faculty, which means a good grounding in the basics and the right guidance at an early and impressionable age. And I would argue that this is great preparation for either an engineering or an academic career (certainly a lot more is required for a top academic career, but all I’m claiming is that the foundation is pretty good). Finally, the whole IIT system is just setup with a focus on undergraduate education, so to be fair, the faculty also do not have the right incentive system in place to be top researchers.

2.
I have doubts about the claim that the added value of the education is close to zero. If nothing else, one does learn a bunch of material that is immediately applicable in a job and is valuable to employers — for instance, learning to devise and program algorithms (which is a skill hard to acquire in a short period of time on a job). Plus there are other things such as maturity in dealing with people and learning through interactions with other smart kids that do add value in a more intangible way. For all my doubts about that claim, I do see your basic point and think that the following weaker claim is agreeable: if you were to increase the quality of IIT faculty, the education would add a lot more value to the students. The obvious (sad) corollary is that its throwing away a lot of it right now. On a related note, an interesting anecdote that this post brings to mind is something I remember a professor saying at my first day in IIT: “at the end of this program, an employer will hire you only because you cleared this entrance exam, not because you spent four years here!” I think he was underselling himself, or maybe (more optimistically) trying to make us feel good :)

3.
It is tempting to brandish the supply-demand sword, but I think its a little deeper than that. As I see it, there are two problems here: (i) The well-entrenched hierarchy system in India implies that most employers would blindly prefer to hire a person with a Bachelor’s degree against a provably more competent person who doesn’t have one. This is slowly changing, but some things are hard to change quickly in a traditionally conformist society. (ii) There are a million (crazy, i might add) rules that govern who can apply for what program based on what they have already done. For instance, if you failed to study biology for a couple of years as a high school student (a choice made by a 15 year old), then *no matter what you do* (AFAIK) you cannot get admission to a program in medicine in India. Similar craziness abounds in terms of age requirements, admission to Masters programs, your value on the marriage market (really!) etc so people choose to be risk-averse and get the degree.

4. It is not hard to guess at the reason behind the proliferation of “technology” or “management” institutes — these are the most promising avenues to end up a job that does more make ends meet, and India is still pretty much on the base of Maslow’s hierarchy.

This is already a long comment, but I wanted to add that the above is not to portray Indian institutions in a bad light. Rather, this is an insider perspective of the Indian system with my added benefit of hindsight…

Prof. Vohra did you fail to get an admission at an IIT?
I very much think so….
IITs are excellent institutes for undergraduate education and quite good for graduate education, given the resources provided to them. Having studied at a top CS university in USA (by top I mean ranked 1), I can very easily say that the quality of undergrads at IITs is equally good, if not better than there american counterparts!!!!

Oh, you cut me to the quick. But wait. Whether I was rejected or not from the IIT’s explains my motives but says nothing about the strength of my arguments. These stand independent of my motives.

Your observations about the quality of students around you at the IIT vs unamed # 1 do not contradict what I said in the post. Indeed, your justification for why the IIT’s are excellent was based on the quality of students. You did not say whether classes were excellent or professors superb. In short what was the added value of attending? Perhaps the same added value could have been achieved by simply administering the Joint Entrance Exam, announcing a cutoff and dispensing with the IIT’s all together.

“In short what was the added value of attending? ”
— I donot see how can a student learn all about computer science, just after giving JEE. Whatever he learns, he gets it from the professors and the classes.
Agreed, the classes are not as good, as they are in USA (we donot have turing award, or ACM fellows teaching us) but they are pretty good.
You should realize that in order to produce good undergrads, you donot need amazing teachers, you need good enough teachers with the best curriculum. And I think the curriculum and the facilities, given to us are definitely WORLD CLASS.

Very nice link posted by Mahesh.
I guess this ends the discussion too. Prof. Vohra, should know other stories about IITs too.
No wonder they are not as good as top research universities in US, but still it is the best one can find in India and they are far better (in terms of undergraduate education atleast) than most American Universities (definitely better than north western :) )

Interesting post. I attended one of the IITs back when the admission procedure and the IIT brand were still undiluted. I agree with your observation about the quality of faculty at IIT. Most IITians will not only acknowledge this, they will gladly recall countless hilarious anecdotes to support it! As per academic resources are concerned, at least when limited to computer hardware, library and journal access, IIT was comparable to mid to higher ranked universities in US. You had to be a little resourceful sometimes, but it was all there. Of course, we didn’t have our cricket matches televised on national TV!

It seems like you are equating value added by an undergraduate institution solely to the research potential / intellectual capital of the faculty. Without going into a theoretical criticism of this argument let me just provide my personal experience. When I first arrived here as a student in a top 10 grad school I was floored by the quality of the faculty here. Some of them were stalwarts in their field and it was a genuine privilege to be in their tutelage. At the same time, I was doing as well if not better than the rest of the class, particularly compared to the students with US undergrad background. The competition was really the East Asian and East European students. Comparing with the experience of other IIT class mates, this experience is no way atypical. So IIT must have done something right to prepare us.

To some extent one may still try to explain above via selection bias: motivated, hard working students continuing to perform well. And there is some truth to that. So let me make a few more observations.

My four years at IIT were some of my most stimulating and formative years of my life. Walking into the hall (dorm) for the first time and seeing a 16 year old guy sitting in the corner and solving Rubik’s cube using group theory expand your horizon a little bit. Or spending summer afternoons informally competing to solve Polya-Szego or Knuth (even though none of these are remotely in the curriculum) is also bound to have some residual effect. I will spare thousand such anecdotes. Point is, there is a significant network effect of being around good guys. Although such experience requires a strong selection process, the cloistered time together from my experience has a direct causal link to subsequent performance.

There is truth to your statement that some students (often very bright ones) takes a nonacademic route at IIT and use the four years as a respite before springing into IIM. But is anyone going to argue that the same doesn’t happen in undergrad programs in top US schools? Also, having taught undergrad classes in US I think that the course curriculum in US may have an edge over the IIT courses. However, in terms of difficulty of exams, home-works and rigor in grading, IITs were much tougher and better. Most problems, like the entrance exam, forced you to think. Largely, one need not be a subject expert to teach and design an undergrad course. A good grasp of fundamentals and a reasonable knowledge is enough. For that the IIT teachers were good enough.

More importantly, selection quality of students *is* the hallmark for all education institutions. When MIT/Standford admits only C grade students and still maintains its standard of excellence I will admit otherwise. This is particularly true for undergrad education. The point is to get motivated kids together, create an inspiring environment and hopefully instill some rigor in their thinking. The particulars field of study serves mainly as a starting point. Who takes a BS seriously?

I would agree with the point about quality of faculty being a determining criterion for adding value in grad schools. In this area, IITs still appears to be behind. Ironically, and perhaps beside the point, one may still argue that the selection process is still in effect. Namely, the top US schools are top not because they have better resource or some other tangible physical advantage, but really they can attract and selectively admit not only top students but only the top professors.

I take your point about the network effect generated by the presence of other students seriously. Indeed, one could argue (and I think that is what you are arguing) that perhaps this is where most of the added value in a University education comes from. It seems that other components of the University experience can be unbundled (lectures, exams). What is not so obvious is how one would replicate the network effect you mention without co-location of students.